Illinois General Assembly - Illinois Compiled Statutes

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760 ILCS 65/8

(760 ILCS 65/8) (from Ch. 17, par. 2008)

Sec. 8.

If a check is drawn upon the account of his principal in a bank by
a fiduciary who is empowered to draw checks upon his principal's account,
the bank is authorized to pay such check without being liable to the
principal, unless the bank pays the check with actual knowledge that the
fiduciary is committing a breach of his obligation as fiduciary in drawing
such check, or with knowledge of such facts that its action in paying the
check amounts to bad faith. If, however, such a check is payable to the
drawee bank and is delivered to it in payment of or as security for a
personal debt of the fiduciary to it, the bank is liable to the principal
if the fiduciary in fact commits a breach of his obligation as fiduciary in
drawing or delivering the check.

(Source: Laws 1931, p. 676.)